Energy XXI Announces Gulf of Mexico Joint Venture With Apache and Provides
*Joint venture with Apache targets salt domes across 135 blocks on Gulf of
*Additional recompletion online at South Pass 49
*Incremental interests acquired at Bayou Carlin
*Current oil production approximates 30,000 Bbl/d
HOUSTON, March 19, 2013 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq:EXXI)
(LSE:EXXI) today provided an update highlighting activity on the Gulf of
Mexico shelf and onshore Louisiana.
Energy XXI Logo (EPR)
Apache Joint Venture
The company has entered into an agreement with Apache Corp. to explore for oil
and gas pay sands associated with salt dome structures on the central Gulf of
Mexico shelf. The area of mutual interest (AMI) includes several salt domes
within a 135 block area.In addition, Energy XXI has acquired a 25 percent
working interest in 21 non-producing primary-term leases with Apache.A new
wide azimuth seismic program is underway to define the potential of the AMI,
covering approximately 633,000 acres.
"This joint venture exemplifies our interest in exploring salt structures
where new seismic data, remapping and remodeling could uncover significant
hidden hydrocarbons," Energy XXI Chairman and Chief Executive Officer John
Schiller said."Our Pendragon exploration well, being drilled in the Vermilion
area, is a similar analog. We are very excited about the potential of this new
joint venture with Apache, a world-class operator with extensive expertise in
the Gulf of Mexico."
At the South Pass 49 field, the company has continued its recompletion program
to the D-65 sand.Well A-7 (56.5% WI / 47.08% NRI) was the first recompletion
to come online, in December 2012, and now has a stabilized flow rate of 14
million cubic feet of gas per day (MMcf/d) gross.Well A-19 (49.4 WI / 37.0%
NRI) was the second recompletion, which came online this month and currently
is flowing 6 MMcf/d and 135 barrels of condensate per day gross.Well A-17
(56.5% WI / 47.08% NRI) is currently being recompleted to the D-65 sand and
should be online in April.The A-6 well (56.5% WI / 47.08% NRI) recompletion
to the D-65 sand will follow A-17.Since the South Pass 49 recompletion
program started in October, overall field production has more than doubled.
At West Delta 73 (100% WI / 83% NRI), Maroon, the company's fourth horizontal
oil well in the field, was drilled to 8,281 feet true vertical depth (TVD) /
10,071 feet measured depth (MD), including a 1,200-foot horizontal section in
the F-40 oil sand. The well is currently testing and under evaluation.
"We continue to grow more confident in the upside of our horizontal oil
drilling program," Schiller said. "As anticipated, our horizontal wells are
trending right around our mid to high-side case, which represents about a
five-fold average increase in recoverable oil per completion."
At South Timbalier 54 (100% WI / 87% NRI), Viper, Energy XXI's first
horizontal well in the field, was drilled to 4,849 feet TVD / 6,670 feet MD,
including a 680-foot horizontal section in the A-1 oil sand. Viper was placed
online in mid-March at approximately 500 BOE/d gross.Viper is the first of a
five-well horizontal program planned for the South Timbalier 54 field.Iceman,
the next horizontal well in the field, has been drilled to the target depth of
6,620 feet MD, and the horizontal section is currently being drilled. To date,
the A-1 sand has produced almost 30 million barrels of oil at South Timbalier
The Pendragon well (50% WI / 40.6% NRI), located on Vermilion Block 178, is
currently drilling past 12,400 feet TVD/14,000 feet MD with a proposed total
depth of 16,300 feet TVD/ 20,400 feet MD.The exploratory well is targeting
multiple sands on the south side of a salt dome.
Onshore Louisiana in St. Mary's Parish, following the acquisition of the
McMoRan working interest in the Bayou Carlin field announced at the end of
January, Energy XXI acquired an additional working interest in the field from
a private company for $34 million. This additional acquisition takes Energy
XXI's working interest in the currently producing Landers and Peterson wells
at Bayou Carlin to 73.5 percent from 56.5 percent, adding 1,035 BOE/d in net
production to Energy XXI.
"Our recent bolt-on acquisitions at Bayou Carlin represent a strategic
opportunity in South Louisiana," Schiller said."As operator of the field, we
are moving quickly to prove up the extent of the discovery with the drilling
of the third well in the field."
The Duplantis well (98.7% WI / 73.9% NRI) in the Bayou Carlin field was spud
in late February and is drilling below 11,400 feet TVD/MD toward a proposed
depth of 20,400 feet TVD/MD.Duplantis is targeting the MA-10 and MA-11A sands
currently producing in existing wells, in addition to potential shallower and
deeper sands that could add to the field's size.
Current production approximates 46,000 BOE/d net, including about 30,000
barrels per day (Bbl/d) of oil, with approximately 5,000 BOE/d temporarily
offline due to various unrelated issues, bringing total capacity to
approximately 51,000 BOE/d.Production for the fiscal third quarter ended
March 31, 2013 is expected to average 44,000 BOE/d, of which approximately
29,000 Bbl/d is oil.
Hedge Position Update
Energy XXI restructured 16,000 Bbl/d of previously existing calendar year 2013
Brent put spreads, increasing the average protection level nearly $23.00/Bbl
to approximately $106.00/Bbl, for a cost of $2.67/Bbl. Restructuring
included purchasing 5,000 Bbl/d of calls for calendar year 2013, and an
additional 5,000 Bbl/d of calls through June 2013, taking advantage of
historically low implied volatility, to substantially enhance the upside
potential of crude oil revenue.
All statements included in this release relating to future plans, projects,
events or conditions and all other statements other than statements of
historical fact included in this release are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based upon current expectations and are subject to a number of
risks, uncertainties and assumptions, including changes in long-term oil and
gas prices orother market conditions affecting the oil and gas industry,
reservoir performance, the outcome of commercialnegotiationsand changes in
technical or operating conditions, among others, that could cause actual
results, including project plans and related expenditures and resource
recoveries,to differ materially from those described in the forward-looking
statements. Energy XXI assumes no obligation and expressly disclaims any duty
to update the information contained herein except as required by law.
About the Company
Energy XXI is an independent oil and natural gas exploration and production
company whose growth strategy emphasizes acquisitions, enhanced by its
value-added organic drilling program. The company's properties are located in
the U.S. Gulf of Mexico waters and the Gulf Coast onshore.Cantor Fitzgerald
Europe is Energy XXI's listing broker in the United Kingdom. To learn more,
visit the EnergyXXI website at www.EnergyXXI.com.
Barrel – unit of measure for oil and petroleum products, equivalent to 42 U.S.
BOE – barrels of oil equivalent, used to equate natural gas volumes to liquid
barrels at a general conversion rate of 6,000 cubic feet of gas per barrel.
BOE/d – barrels of oil equivalent per day.
MD – measured depth.
MMcf/d – million cubic feet of gas per day.
Net Pay – cumulative hydrocarbon-bearing formations.
NRI, Net Revenue Interest – the percentage of production revenue allocated to
the working interest after first deducting proceeds allocated to royalty and
TVD – true vertical depth of a well.
WI, Working Interest – the interest held in lands by virtue of a lease,
operating agreement, fee title or otherwise, under which the owner of the
interest is vested with the right to explore for, develop, produce and own
oil, gas or other minerals and bears the proportional cost of such operations.
Workover / Recompletion – operations on a producing well to restore or
increase production. A workover or recompletion may be performed to stimulate
the well, remove sand or wax from the wellbore, to mechanically repair the
well, or for other reasons.
CONTACT: ENQUIRIES OF THE COMPANY
Vice President, Investor Relations and Communications
Director, Investor Relations
Nominated Adviser: David Porter, Rick Thompson
Corporate Broking: Richard Redmayne
Tel: +44 (0) 20 7107 8000
Pelham Bell Pottinger
+44 (0) 20 7861 3232
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